New Zealand's government expects to raise up to $1.8 billion US by selling nearly half of the country's largest power company.

Documents filed Friday show the government expects to raise between 1.9 and 2.2 billion New Zealand dollars ($1.6 billion and $1.8 billion  by selling a 49 per cent of state-owned Meridian Energy.

The share offer is the centrepiece of a contentious government asset sales policy. The centre-right government says the proceeds will help reduce New Zealand's public debt and pay for hospitals, schools and roads. Opponents have likened the program to selling the family silver. The government hopes to raise at least $5 billion (NZ) from asset sales.

Under the Meridian offer, buyers will need to pay $1 (NZ) initially for shares and then pay a second installment of between $0.50 (NZ) and $0.80 (NZ) after 18 months. New Zealand mom-and-pop retail investors are guaranteed a price not over $1.60 (NZ) per share while institutional investors may end up paying more.

Meridian to be listed Oct. 29

Meridian generates about 30 per cent of New Zealand's electricity from hydro dams and wind farms.

The company will list on the New Zealand and Australian stock markets on Oct. 29.

The initial public offering will likely make Meridian the most valuable company on the New Zealand stock market, with a capitalization of up to $4.4 billion (NZ). The government will keep control of Meridian through its 51 per cent stake.

The government in May raised $1.7 billion (NZ) by selling 49 per cent of another power company, Mighty River Power, but the performance of its shares has so far disappointed many mom and pop investors. The stock was trading at $2.22 (NZ) Friday, more than 10 per cent below its IPO price of $2.50 (NZ), despite the broader market reaching all-time highs this week.

The Meridian IPO valuation, however, is considerably less than a government valuation last year that put the company's worth at $6.6 billion (NZ).

Part of the reduction is due to uncertainty surrounding the future of an aluminum plant, majority owned by Rio Tinto, which is Meridian's single biggest customer. Also hurting the value are new policies announced by opposition political parties that would increase government control of the electricity market and force down residential electricity prices.

"It would be nice to be getting $10 billion (NZ), wouldn't it, because we have a lot of infrastructure demands," said Finance Minister Bill English on Friday, adding that: "The value is what is."

Opposition wants referendum

Opponents said the low price highlights the program's failure.

"This is a fire sale, pure and simple," said opposition lawmaker Clayton Cosgrove in a statement.

The program has proved contentious, and opponents recently gathered more than 300,000 signatures to force a national referendum on whether people support the sales. The result of the referendum will likely be only symbolic, however, because the referendum won't be held before the sales are completed, or nearly completed, and won't compel the government to act.